Posts Tagged ‘GOLD’

Welcome to the top of the ride … all downhill from here.

There is an adage in the market that says,

“Sell in May and walk away.”

Well, there are many leading indicators that are now pointing DOWN, way down.

From the Treasury Market Inflation Forecast to the Economic Cycle Research Institute’s (ECRI) Long Leading Index of global industrial growth, these indicators are showing that the “W” of recovery is more likely.

Given that the US housing market has not rebounded as was once hoped, that the QE and QEII have only resulted in a short term bull rally in the stock market and a temporary easing of short term bond rates and not the much touted employment that the bankers and others from Wall Street and DC were promising was ‘on the way’.  Indeed employment numbers are stalled, much like the sense one has in a roller coaster car just as you reach the top of the first ‘hill’ after being released from the lift chains.  We have had a drop and a ‘scare’ now the real ride begins.

Richard Russell, 86-year old author of the Dow Theory Letters commented as follows on the deteriorating market breadth: “This is a bearish picture. The ‘soldiers’ are deserting even while the ‘generals’ continue to march forward. In a war, this would be a prelude to disaster. In the stock market, it may be the same.”

I agree with that sentiment and add in argument that the broader market place is going to go into a panic situation, this summer will be pleasant enough, like the roller coaster car moving gently along the top of the rail in a near flat grade.  By this autumn?  Well Kondratieff Winter will blow in for real with a storm to remember …

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The steady retreat

Many have commented about the ‘flat’ of the stock markets and there are continuing signs of financial contagion in European markets.

Asian market trend lines are also going, or already gone flat to down (even Dr. Copper is predicting a reduction in commodity prices).

The controlled retreat from equities and the ‘cash’ marketplace is indicative of a general awareness of the limits of the current ‘currency’ system.

The decoupling of gold from all currencies is underway and this year will see the real ‘gold rush’ get started. There is only one place to shelter value that has stood the test of time for 20 centuries : GOLD.

I am not talking about the GLD index or some other ‘safe keeping certificates’ either, when the situation really goes into overdrive only one thing will matter, “Do you have the physical metal?” If the answer is no then the response to the transaction will likely be the same.

If you have a desire to participate in the gold market at or near ‘spot’ price then contact me at your earliest convenience.

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